The latest issue of SAP’s Business Flash newsletter just popped into my in-box. Under the email’s catchy headline “Companies That Run SAP Have 32% More High Fives At Their Staff Meetings” runs this sentence: “A recent study of companies listed on NASDAQ and NYSE found that companies that run SAP are 32% more profitable than those that don’t.” At the end of the sentence is an asterisk that leads to a footnote: “Based on a 2005 Stratascope Inc. analysis of publicly available fiscal results of all non-financial companies listed on NASDAQ and NYSE.” OK, I’m intrigued. A broad study that links a particular corporate software program to vastly outsized profits is interesting. I want to learn more.

So I click on a link in the email that says “We invite you to see for yourself,” figuring it will bring me to a copy of the study, or at least to some details on the research. Wrong. The link brings me to a marketing page on the SAP site filled with the usual slogans, like “enable business flexibility.” The only information on the study is this: “Companies that run SAP are 32% more profitable, according to results from a 2005 Stratascope Inc. study, which analyzed publicly available financial results of NASDAQ and NYSE companies. The study also found that these companies delivered 28% more return on capital. Clearly, SAP customers have a strong track record of outperforming their peers.”

Clearly? Seems pretty opaque to me. I mean, where’s the data?

Not to be put off, I do some searching, assuming that the details of the study have been published somewhere. Nope. I can’t find any trace of this research on the web. I do, though, find the home page of Stratascope, the company that did the research. Its business consists mainly, it seems, of providing IT sales forces with financial data on public companies. On every page of its site is a large promotional advertisement highlighting some of its key clients, one of which is SAP. Hmm. I also find that the chairman and president of Stratascope, Juergen Kuebler, “was employed at SAP AG for 9 years where he was responsible for the sales launch of the product ‘R/3 on AS/400’ as well as the sales training of the complete staff at SAP AG.” Now, the fact that SAP and Stratascope are cozy – and that it’s in Stratascope’s interest to make its client happy – doesn’t mean that Stratascope’s research is necessarily unsound. But it does raise questions – questions that can only be answered through a careful review of the research methodology and results. A review rendered impossible by the fact that neither SAP nor Stratascope is revealing details about the research.

This isn’t an isolated problem. IT companies are always throwing around seemingly precise statistics claiming to show that their hardware or software is associated with competitive advantage or superior financial results. As far as I’ve been able to discover, the research is almost always dubious. Either the methodology is flawed (tiny or biased samples), or the research is carried out by the company itself or some sycophantic supplier. And rarely are the full details of the study divulged. IT buyers shouldn’t pay any attention to such faux statistics. If a vendor dresses up its marketing slogans with research results, then it should show us the data – all of the data.

This may or may not offer any insight into the different ways information technology is viewed in the world, but here’s the cover of the Japanese translation of my book:

And here’s the cover of the Russian translation:

I’m fond of the fist, personally.

Until Google came along, internet search suffered from two big problems as a business. First, it was hard to make money off the end users (as a result, search engines had become commodity services sold to and rebranded by portals) and, second, switching costs were low (there was little to stop users from hopping from engine to engine). Google solved the first problem, cracking the nut on search-based advertising, but it has never really solved the second problem. Users flocked to Google because its PageRank algorithm provided clearly superior results to those of other engines, but most Google users remain ripe for the picking – there’s little to stop them from switching to another engine if they’re so inclined. (Habit can be strong, but it’s not that hard to break, at least on the internet.)

The low switching costs could turn into a big problem for Google for a simple reason: basic internet search is once again a commodity. Do a search on Google or MSN or Yahoo, and you’ll find little differentiation in the relevance of the results. Yes, if you’re a super-sophisticated searcher, you may be able to point to variations that you think are important, but casual searchers won’t notice any difference – and the vast, vast majority of searchers are casual searchers. There may be another great, proprietary breakthrough in internet search in the future, but for the moment Google has lost its lead. As for expanding search to more specialized areas, like 18th century manuscripts or academic working papers on quantum physics, that’s not going to make much of a difference to Joe and Jane Searcher, neither of whom gives a toss about musty books or egghead treatises.

Of course, Google knows this, as do its competitors. They’re all looking for ways to increase switching costs, or, as we used to say, make search sticky. One way is to make it easier for a user to default to your engine – by embedding a toolbar on his desktop, say, or putting a search box into his browser window. That can be pretty powerful. I’ve continued to use Google for most of my searches simply because Apple stuck a search box in the corner of my Safari browser window. But it’s also a tenuous advantage. If in the next Safari update that box gets switched to Yahoo search, I doubt I would go to the trouble of hacking it back to Google. I’d start using Yahoo. Unless you control the desktop or the browser, in other words, you’re stickiness is in somebody else’s hands. Somebody like Microsoft, who may just happen to be your biggest competitor. Or somebody like Apple, who sooner or later is going to sell its real estate to the highest bidder, squeezing your profit margin, or incorporate internet search into its own Spotlight engine. Or somebody like Dell, or HP, or even IBM.

A better approach is to do what Yahoo’s doing with My Search 2.0 – using personalization to embed proprietary data into search services. With My Search, you can tag pages that interest you and then restrict future searches to the tagged set. (You can also join up with friends to tag interesting pages, and then restrict future searches to the “community pages.”) Because you can’t take your tagging data with you when you go to Google or MSN, you suddenly face a real switching cost. Of course, it remains to be seen how attractive personalized search services will be to Joe and Jane Searcher (who may not give a toss about tagging or communal browsing, either). And you can bet that other search providers will quickly mimic any such service – so while it will increase switching costs, it won’t necessarily enhance competitive differentiation.

There’s also the old-fashioned portal strategy: provide an array of useful services to get users to spend a lot of time at your site, and they’ll tend to default to your search service. That’s still a good strategy – even if in the long run portals become relatively less important in people’s everyday use of the net – which is why Google, despite its promises to the contrary, now offers a portal. But in this model, search inevitably becomes relatively unimportant again – differentiation and switching costs lie elsewhere in the business.

Maybe, then, what we’ve seen in the last few years is an aberration. Maybe the basic internet search engine is fated to be a cheap commodity running behind the scenes. And maybe those who control the search function – and most of the related ad revenues – won’t be the guys running the engine but those who own the desktop or the portal (or whatever replaces the desktop or the portal). Maybe search doesn’t really matter.

Amazon.com has out-googled Google with its creepily brilliant Mechanical Turk service, a means of embedding human beings in software code. If you’re writing a program that requires a task that people can do better than computers (identifying buildings in a photograph, say), you can write a few lines of code to tap into the required human intelligence through Mechanical Turk. The request automatically gets posted on the Turk site, and people carry out the Human Intelligence Task, or HIT, for a fee set by the programmer, with Amazon taking a commission.

As Amazon explains, this turns the usual computer-human interface on its, uh, head:

When we think of interfaces between human beings and computers, we usually assume that the human being is the one requesting that a task be completed, and the computer is completing the task and providing the results. What if this process were reversed and a computer program could ask a human being to perform a task and return the results? What if it could coordinate many human beings to perform a task?

I have no clue how useful Mechanical Turk will prove immediately, but Philipp Lenssen (who foresaw the service in a remarkable post earlier this year) thinks the “potential is immense.” Certainly, the implications are mind-bending. In an essay I discussed last week, George Dyson described how the Internet provides a platform, or operating system, that enables computers to harness and learn from the work of people: “Operating systems make it easier for human beings to operate computers. They also make it easier for computers to operate human beings.” Google uses this capacity implicitly by basing its search engine on human actions and decisions – as we make our daily strolls through the Web, Google gets smarter. Amazon’s Mechanical Turk uses the capacity explicitly, turning people into a “human layer” in software.

But let’s not get too comfortable in our new role. No one, after all, is indispensable.

An addendum to that last post: Google Print doesn’t just raise complicated issues regarding ownership, compensation and copyright. It also provokes tricky questions about how content and form will be influenced over the longer run. At what point does a writer stop writing for the reader and start writing for the scanner?

Unlikely bedfellows Pat Schroeder and Bob Barr team up to make a case against Google Print in an op-ed in the Washington Times today. The piece is a response to Google CEO Eric Schmidt’s recent op-ed in the Wall Street Journal. Unfortunately, the Schroeder/Barr article is as shrill as Schmidt’s was self-righteous. At one point, they write, “Not only is Google trying to rewrite copyright law, it is also crushing creativity. If publishers and authors have to spend all their time policing Google for works they have already written, it is hard to create more.” That’s silly.

But Schroeder/Barr do raise issues that lie at the heart of how we’ll think about the ownership of creative work in a world where all that work can be stored in a database operated by one, or a few, profit-making companies:

Our laws say if you wish to copy someone’s work, you must get their permission. Google wants to trash that …

Authors may be the first targets in Google’s drive to make the intellectual property of others a cost-free inventory for delivery of its ad content, but we will hardly be the last. Media companies, engineering firms, software designers, architects, scientists, manufacturers, entertainers and professional services firms all produce products that could easily be considered for “fair use” by Google.

Google envisions a world in which all content is free; and of course, it controls the portal through which Internet user’s [sic] access that content. It would completely devalue everyone else’s property and massively increase the value of its own.

Google’s moving forward with its plan to scan copyrighted works into its database without the permission of the copyright owners. Whether you’re in favor of that or against it, it’s worth pausing a moment to ask where exactly all of this is headed.

Yes, it’s the first Western Civilization Smackdown!

Number of paragraphs in Wikipedia entry:

John Keats: 7

The Matrix: 62

It’s over, folks! Cult Sci-Fi Flick Starring Keanu Reeves does some serious whoop-ass on Consumptive Romantic Poet Who Writes Odes!